Memory makers plan to reduce nand production

The NAND flash technology business goes through boom and bust periods very often. After a year of very profitable boom in 2018, it seems that the market is in a downward phase, as excess supply is beginning to affect the final results of memory manufacturers.

Manufacturers plan to cut NAND production to combat falling prices

To curb any chance of significant loss or a true market crash, three major NAND memory makers, Intel, Micron and SK Hynix have announced that they will take steps to resolve the oversupply problem by reducing flash output, reduce wafer start-up or slow production growth from new factories. Also, it is very likely that another major manufacturer, Samsung, will do the same.

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The rapid transition to high-capacity 64- and 96-layer 3D NAND memory devices has enabled memory manufacturers to increase their supply of NANDs and ultimately saturate the market with them.

Meanwhile, server demand in recent months has been weaker than expected, smartphone update cycles are lengthening, and other factors driving NAND demand have also disappointed. As a result, NAND supply has far outstripped demand, leading to a price drop of up to 20% across various categories in the first quarter of 2019. This means less profit for manufacturers.

Intel, which has traditionally focused on the business side of the SSD drive market, has also announced this week that it will reduce its NAND production in 2019.

Samsung has yet to announce its first quarter 2019 results, it has already warned investors that its earnings for the quarter would be 60% lower compared to the first quarter of 2018. Analysts have been attributing this to multiple factors., including the demand for smartphones and lower prices for DRAM and NAND memory.

For now, the price, above all, of SSD drives will continue to fall until the end of the year.